Stellar (XLM), a leading entity in the blockchain space, has underscored the necessity of open blockchain infrastructure as a means to prevent monopolistic control and to foster innovation and trust among users, according to a recent Stellar blog post.
The discussion, drawing parallels with historical advancements in railroads, telecommunications, and the internet, highlights that infrastructure is most effective when it’s accessible to everyone and not dominated by a single entity. This philosophy has been pivotal in shaping the modern internet and is seen as crucial for the future of blockchain.
Open, permissionless infrastructure promotes competition, allowing developers to select networks that best meet their needs, thereby driving improvements in speed, cost, security, and features. This is akin to how SMTP and TCP/IP protocols revolutionized email and internet connectivity, respectively. Such open standards have historically led to value creation far beyond what any single company could achieve.
Trust is another cornerstone of open infrastructure. With open-source code, anyone can verify the system’s functionality, ensuring that no single entity can manipulate the system for self-gain. Transparency in governance and economics prevents hidden fees, promoting fairer systems.
Stellar emphasizes the importance of interoperability, where systems designed to work together enable seamless value transfer, reducing costs for users. Open standards empower users to choose the most suitable tools without sacrificing connectivity, much like the universal nature of email.
The potential for innovation is significantly higher at the edges of open systems. Open infrastructure allows developers globally, from a Lagos-based developer to a São Paulo startup, to create solutions tailored to local needs without needing centralized approval. This decentralized innovation approach is seen as vital for the emergence of new financial services.
Stellar points out that the internet’s success was largely due to the choice of open protocols over proprietary networks. Now, as blockchain technology reaches a similar juncture, the opportunity exists to proactively choose the right architectural path. This decision could shape a more inclusive financial infrastructure that benefits a broader audience rather than a select few.
